Pre-tax 401(k) contributions are taken directly out of your paycheck before federal or state taxes are applied. Making pre-tax 401(k) contributions reduces your taxable income for that year. When you disburse your pre-tax 401(k) funds you'll be taxed on the money you originally contributed, plus any earnings that have accumulated over time, as ordinary income. Learn more about what 401(k) contribution types may be best for you.
Articles in this section
- What are Roth 401(k) contributions?
- What are pre-tax 401(k) contributions?
- Choosing between pre-tax or Roth 401(k) contributions
- What is considered employee compensation for your 401(k) Plan?
- What are mutual funds?
- What's Dollar-Cost Averaging?
- I heard the economy is bad right now - Why should I invest?
- What is an AUM fee?
- What's a Saver's Credit and how can it help me save more?
- I can't afford to contribute to a 401(k) right now - What should I do?